U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                  For the quarterly period ended March 31, 2001

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
    EXCHANGE ACT OF 1934


From the transition period from                    to
                               --------------------  --------------------


Commission File Number 001-14015


                             U.S. HOME & GARDEN INC.
             (Exact name of registrant as specified in its charter)


         Delaware                                              77-0262908
(State or other jurisdiction                                  IRS Employer
of incorporation or organization)                        (Identification Number)


655 Montgomery Street
San Francisco, California                                        94111
(Address of Principal Executive Offices)                       (Zip Code)


                                  (415)616-8111
              (Registrant's Telephone Number, Including Area Code)

Indicate by check whether the registrant:  (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                              Yes   X    No
                                  -----    -----

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common equity, as of the latest practicable date.

As of May 4, 2001 there were 17,628,379 shares of the issuer's common stock, par
value $.001 per share, outstanding.

<PAGE>


Part I. -  Financial Information

Item 1. -  Consolidated Financial Statements

Consolidated balance sheets as of June 30, 2000                             1-2
and March 31, 2001 (Unaudited)

Consolidated statements of income for the three months and nine
months ended March 31, 2000 and 2001 (Unaudited)                              3

Consolidated statements of cash flows for the nine months                   4-5
ended March 31, 2000 and 2001 (Unaudited)

Notes to consolidated financial statements                                  6-8

Item 2. -  Management's Discussion and Analysis of Financial               8-14
Condition and Results of Operations

Item 3. -  Quantitative and Qualitative Disclosures About Market Risk        15

Part II. - Other Information

Item 1. -  Legal Proceedings                                                 16

Item 6. -  Exhibits and Reports on Form 8-K                                  16

Signatures                                                                   17

<PAGE>


                    U.S. Home & Garden Inc. and Subsidiaries

                           Consolidated Balance Sheets


<TABLE>
<CAPTION>
                                                               June 30, 2000  March 31, 2001
                                                               -------------  -------------
                                                                               (Unaudited)
<S>                                                             <C>            <C>
Assets

Current
     Cash and cash equivalents                                  $  7,338,000   $  3,811,000
     Restricted cash                                               1,582,000             --
     Accounts receivable, less allowance for doubtful
       accounts and sales returns of $1,199,000 and $1,113,000    19,972,000     26,058,000
     Inventories                                                  12,843,000     18,595,000
     Prepaid expenses and other current assets                       606,000        775,000
     Refundable income taxes                                              --      1,249,000
     Deferred tax asset                                              210,000        210,000
                                                                ------------   ------------

Total Current Assets                                              42,551,000     50,698,000

Deferred Tax Asset                                                 1,173,000      2,740,000

Property and Equipment, net                                       13,622,000     14,962,000

Intangible Assets
     Excess of cost over net assets acquired, net                 73,395,000     71,421,000
     Deferred financing costs, net of accumulated
         amortization of $372,000 and $516,000                     3,093,000      2,948,000
     Product rights, patents and trademarks, net of
         accumulated amortization of $47,000 and $75,000             555,000        569,000
     Non-compete agreement, net of accumulated
         amortization of $106,000 and $126,000                     1,404,000      1,384,000
     Package tooling costs, net of accumulated
         amortization  of $929,000 and $1,267,000                  1,359,000      1,390,000
     Exclusivity agreements, net of accumulated
         amortization of $62,000 and $366,000                      1,398,000      1,252,000

Officer Receivables                                                  655,000        716,000

Other Assets                                                         513,000        289,000
                                                                ------------   ------------
Total Assets                                                    $139,718,000   $148,369,000
                                                                ============   ============
</TABLE>


          See accompanying notes to consolidated financial statements.


                                       1
<PAGE>


                    U.S. Home & Garden Inc. and Subsidiaries

                           Consolidated Balance Sheets


<TABLE>
<CAPTION>
                                                             June 30, 2000    March 31, 2001
                                                             -------------    --------------
                                                                                (Unaudited)
<S>                                                          <C>              <C>
Liabilities and Stockholders' Equity
Current
     Current portion of lines-of-credit                      $   3,125,000    $  34,900,000
     Accounts payable                                            6,187,000       10,262,000
     Income taxes payable                                        2,413,000               --
     Accrued expenses                                            2,260,000        3,066,000
     Accrued commissions                                         1,296,000        1,293,000
     Accrued co-op advertising                                   1,143,000          453,000
     Accrued rebates                                             1,075,000        1,340,000
                                                             -------------    -------------

Total Current Liabilities                                       17,499,000       51,314,000

Acquisition Line of Credit, less current portion                13,875,000               --
Deferred Tax Liability                                           1,358,000          553,000
Other Long Term Liabilities                                        792,000          388,000
Company Obligated Mandatorily Redeemable
  Preferred Securities of Subsidiary Trust Holding
  Solely Junior Subordinated Debentures                         56,980,000       56,951,000
                                                             -------------    -------------
Total Liabilities                                               90,504,000      109,206,000
                                                             -------------    -------------
Minority Interest in Equity of Affiliate                         4,111,000        3,255,000
                                                             -------------    -------------

Stockholders' Equity
     Preferred stock, $.001 par value - shares authorized,
      1,000,000; no shares outstanding                                  --               --
     Common stock, $0.001 par value-shares authorized,
      75,000,000; 21,751,000 and 21,433,000 shares
       issued at June 30, 2000 and March 31, 2001                   22,000           21,000
     Additional paid-in capital                                 51,409,000       51,816,000
     Retained earnings (deficit)                                 4,359,000       (3,160,000)
                                                             -------------    -------------
                                                                55,790,000       48,677,000
Less: Treasury Stock, 2,554,000 and 3,805,000 shares
     at cost at June 30, 2000 and March 31, 2001               (10,687,000)     (12,769,000)
                                                             =============    =============
Total Stockholders' Equity                                      45,103,000       35,908,000
                                                             =============    =============
Total Liabilities and Stockholders' Equity                   $ 139,718,000    $ 148,369,000
                                                             =============    =============
</TABLE>


          See accompanying notes to consolidated financial statements.


                                       2
<PAGE>


                    U.S. Home & Garden Inc. and Subsidiaries

                        Consolidated Statements of Income


<TABLE>
<CAPTION>
                                                                  Three Months Ended March 31,        Nine Months Ended March 31,
                                                              -----------------------------------   -------------------------------
                                                                  2000               2001               2000               2001
                                                              ------------       ------------       ------------       ------------
                                                                        Unaudited                              Unaudited
                                                              -------------------------------       -------------------------------
<S>                                                           <C>                <C>                <C>                <C>
Net Sales                                                     $ 36,494,000       $ 26,511,000       $ 63,624,000       $ 50,991,000
Cost of Sales                                                   19,218,000         14,169,000         33,814,000         27,551,000
Unusual Item                                                       928,000                 --            928,000                 --
                                                              ------------       ------------       ------------       ------------
Gross Profit                                                    16,348,000         12,342,000         28,882,000         23,440,000
                                                              ------------       ------------       ------------       ------------
Operating Expenses
   Selling and shipping                                          6,545,000          5,024,000         13,917,000         13,028,000
   General and administrative                                    1,956,000          4,103,000          8,130,000         12,738,000
   Restructuring charges                                                --            800,000                 --            800,000
   Depreciation                                                    427,000            731,000          1,210,000          2,105,000
   Goodwill amortization                                           721,000            821,000          2,173,000          2,388,000
   Other amortization                                              278,000            281,000            487,000            833,000
                                                              ------------       ------------       ------------       ------------
                                                                 9,927,000         11,760,000         25,917,000         31,892,000
                                                              ------------       ------------       ------------       ------------
Income (Loss) from Operations                                    6,421,000            582,000          2,965,000         (8,452,000)
Other Income (Expense)
   Investment income                                                95,000            151,000            257,000            397,000
   Interest expense                                             (1,875,000)        (2,007,000)        (5,726,000)        (5,433,000)
                                                              ------------       ------------       ------------       ------------
Income (Loss) before Income Taxes, Minority
   Interest and Extraordinary Gain                               4,641,000         (1,274,000)        (2,504,000)       (13,488,000)
Income Tax Benefit (Expense)                                    (2,108,000)          (840,000)         1,092,000          5,196,000
Minority Interest in Loss of Affiliates                            259,000            343,000            259,000            769,000
                                                              ------------       ------------       ------------       ------------
Income (Loss) Before Extraordinary Gain                          2,792,000         (1,771,000)        (1,153,000)        (7,523,000)

Extraordinary gain on purchase of Trust
   Preferred Securities, net of income taxes                       943,000                 --            943,000              4,000
                                                              ------------       ------------       ------------       ------------
Net Income (Loss)                                             $  3,735,000       $ (1,771,000)      $   (210,000)      $ (7,519,000)
                                                              ============       ============       ============       ============
Weighted Average Common Shares
   Outstanding-basic                                            19,157,000         17,638,000         19,033,000         18,212,000
Earnings (Loss) per share-basic
Income (Loss) before extraordinary gain                       $        .14       $       (.10)      $       (.06)      $       (.41)
Extraordinary gain                                                     .05                 --                .05                 --
                                                              ------------       ------------       ------------       ------------
Net Income (Loss)                                             $        .19       $       (.10)      $       (.01)      $       (.41)
                                                              ============       ============       ============       ============
Weighted average common shares
   outstanding-diluted                                          21,627,000         17,638,000         19,033,000         18,212,000
Earnings (Loss) per share-diluted
Income (Loss) before extraordinary gain                       $        .13       $       (.10)      $       (.06)      $       (.41)
Extraordinary gain                                                     .04                 --                .05                 --
                                                              ------------       ------------       ------------       ------------
Net Income (Loss)                                             $        .17       $       (.10)      $       (.01)      $       (.41)
                                                              ============       ============       ============       ============
</TABLE>


          See accompanying notes to consolidated financial statements.


                                       3
<PAGE>


                    U.S. Home & Garden Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows


<TABLE>
<CAPTION>
Nine months ended March 31,                                              2000            2001
                                                                     ------------    ------------
                                                                             (Unaudited)
                                                                     ----------------------------
<S>                                                                 <C>             <C>
Cash Flows from Operating Activities:
    Net loss                                                        $   (210,000)   $ (7,519,000)
    Adjustments to reconcile net loss to net cash used in
       operating activities:
       Depreciation and amortization                                   3,870,000       5,326,000
       Minority interest in loss of affiliate                           (259,000)       (769,000)
       Deferred income taxes                                             600,000      (2,372,000)
       Loss on disposal of assets                                          9,000              --
       Extraordinary gain                                               (943,000)         (4,000)
       Compensation related to stock options                                  --         231,000
       Changes in operating assets and liabilities, net of assets
             acquired and liabilities assumed:
       Accounts receivable                                           (12,772,000)     (6,086,000)
       Inventories                                                     1,219,000      (5,752,000)
       Prepaid expenses and other current assets                         362,000        (219,000)
       Accounts payable and accrued expenses                           1,554,000         371,000
       Other assets                                                     (280,000)        224,000
                                                                    ------------    ------------

Net Cash Used in Operating Activities                                 (6,850,000)    (16,569,000)
                                                                    ------------    ------------

Cash Flows from Investing Activities:
       Payment for purchase of businesses, net of cash acquired         (338,000)       (413,000)
       Decrease (increase) in restricted cash                           (582,000)      1,582,000
       Decrease (increase) in officer receivables                          2,000         (61,000)
       Purchase of property and equipment                             (1,896,000)     (3,445,000)
       Proceeds from disposal of assets                                   23,000              --
       Purchase of intangibles                                          (788,000)       (411,000)
                                                                    ------------    ------------

Net Cash Used in Investing Activities                                 (3,579,000)     (2,748,000)
                                                                    ------------    ------------
</TABLE>


                                       4
<PAGE>


                    U.S. Home & Garden Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows


<TABLE>
<CAPTION>
Nine months ended March 31,                                          2000            2001
                                                                ------------    ------------
                                                                        (Unaudited)
                                                                ----------------------------
<S>                                                             <C>             <C>
Cash Flows from Financing Activities:
    Proceeds from issuances of stock                            $    121,000    $         --
    Proceeds from sale of stock of subsidiary                      4,769,000              --
    Repurchase of common stock for treasury                       (1,793,000)     (2,082,000)
    Repurchase of mandatorily redeemable preferred securities     (2,947,000)        (22,000)
    Acquisition finance costs                                        157,000              --
    Proceeds from bank line of credit                             14,500,000      19,900,000
    Payments on lines-of-credit                                   (1,000,000)     (2,000,000)
    Other                                                            (77,000)         (6,000)
                                                                ------------    ------------
Net Cash Provided by Financing Activities                         13,730,000      15,790,000
                                                                ------------    ------------

Net (decrease) increase in cash and cash equivalents               3,301,000      (3,527,000)

Cash and Cash Equivalents, beginning of period                     2,936,000       7,338,000
                                                                ------------    ------------

Cash and Cash Equivalents, end of period                        $  6,237,000    $  3,811,000
                                                                ============    ============

Supplemental disclosure of Cash Flow
 Information
    Cash paid for interest                                      $  5,326,000    $  5,311,000
    Cash paid for taxes/ (refund of taxes)                      $ (1,244,000)   $     34,000
                                                                ============    ============
</TABLE>


          See accompanying notes to consolidated financial statements.


                                       5
<PAGE>


                    U.S. Home & Garden Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements


1.   The accompanying  consolidated  financial  statements at March 31, 2001 and
     for the three  months and nine  months  ended  March 31,  2000 and 2001 are
     unaudited,  but, in the  opinion of  management,  include  all  adjustments
     necessary for a fair  presentation of consolidated  financial  position and
     results of operations for the periods  presented.  The results for the nine
     months ended March 31, 2001 are not  necessarily  indicative of the results
     of operations for a full year.

2.   Refer to the audited  consolidated  financial statements for the year ended
     June 30, 2000, for details of accounting policies and detailed notes to the
     consolidated financial statements.

3.   Inventories consist of:
                                    June 30, 2000                 March 31, 2001
     --------------------------------------------------------------------------
                                            (000)                          (000)

     Raw materials                     $   8,390                     $    8,475
     Finished goods                        4,453                         10,120
     --------------------------------------------------------------------------

                                      $   12,843                     $   18,595
     ==========================================================================

4.   The Company  completed a Credit Agreement with Bank of America (the "Bank")
     on October 13, 1998.  The Credit  Agreement  originally  provided for a $25
     million revolving  acquisition line of credit ("the Acquisition  Facility")
     to finance acquisitions and a $20 million working capital revolving line of
     credit ("the Working Capital Facility"). The Credit Agreement provided that
     borrowings  under such  credit  facilities  will bear  interest at variable
     rates equal to the higher of 0.5% above the then current Federal Funds Rate
     or the Prime  Rate of Bank of  America,  in each case,  plus an  applicable
     marginal rate.

     The Company's  obligations under the Credit Agreement are guaranteed by its
     subsidiaries  and  secured by a security  interest  in favor of the Bank in
     substantially all of the assets of the Company and its  subsidiaries.  Upon
     the  occurrence of an event of default  specified in the Credit  Agreement,
     the  maturity  of loans  outstanding  under  the  Credit  Agreement  may be
     accelerated by the Bank, which may also foreclose its security  interest on
     the assets of the Company and its subsidiaries.

     Under the Credit Agreement,  the Company and its subsidiaries are required,
     among other  things,  to comply with (a) certain  limitations  on incurring
     additional indebtedness,  liens and guaranties,  on dispositions of assets,
     payment  of  cash  dividends  and  cash   redemption  and   repurchases  of
     securities, and (b) certain limitations on merger, liquidations, changes in
     business,  investments,


                                       6
<PAGE>


                    U.S. Home & Garden Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements


     loans and advances,  affiliate  transactions and certain  acquisitions.  In
     addition,  the Company must comply with certain financial tests and ratios.
     A violation of any of these covenants constitutes an event of default under
     the Credit  Agreement.  At March 31, 2001,  the Company was in violation of
     certain financial  covenants;  however, a waiver was obtained from the Bank
     which includes a reduction of the  Acquisition  Facility to $11.75 million,
     increases  the interest rate paid under both the  Acquisition  Facility and
     the Working Capital Facility by an additional 200 basis points and requires
     the Company to pay a waiver fee.

     The  Acquisition  Facility  terminates  May 15,  2001  and the  outstanding
     balance is payable in  quarterly  payments  starting  on June 30,  2001 and
     ending on September 30, 2003. The Working Capital Facility  terminates with
     the balance due on September 30, 2001.  The Company is required to maintain
     a zero  balance,  under  the  Working  Capital  Facility,  for at  least 30
     consecutive  days during the period from July 1 to December 1 of each year.
     Moreover,  if the Company elects to terminate the financing agreement prior
     to the expiration  date, the outstanding  balance must be prepaid  together
     with a premium of 0.5% of the total facility.

5.   Segment  Reporting.  The  Company  operates in two  distinctive  reportable
     segments:    (1)   the   lawn   and   garden    industry   and,   (2)   the
     business-to-business   electronic  commerce  (E-Commerce)   industry.   The
     Company's  reportable  segments  are  business  units that offer  different
     products and services and are managed  separately due to different types of
     customers, technology, methods of distribution and marketing strategies.

     The accounting  policies of the segments are the same as those described in
     the summary of accounting policies. The Company evaluates performance based
     on  operating  income  or  loss  of  each  segment.   Transactions  between
     reportable segments are eliminated.

     The revenues and operating income of the reportable segments are as follows
     for the period ended March 31, 2000 and 2001.

<TABLE>
<CAPTION>
(000)                                  Three Months Ended March 31,      Nine Months Ended March 31,
                                       ---------------------------       ---------------------------
                                          2000             2001             2000             2001
                                        --------         --------         --------         --------
<S>                                     <C>              <C>              <C>              <C>
Revenues:
      Lawn and Garden                   $ 36,494         $ 26,507         $ 63,624         $ 50,978
      E-Commerce                              --                4               --               13
                                        --------         --------         --------         --------
          Total Revenue                 $ 36,494         $ 26,511         $ 63,624         $ 50,991
                                        ========         ========         ========         ========

Operating Income (Loss):
      Lawn and Garden                   $  8,342         $  2,855         $  5,437         $ (1,299)
      E-Commerce                          (1,921)          (2,273)          (2,472)          (7,153)
                                        --------         --------         --------         --------
   Total Operating Income (Loss)        $  6,421         $    582         $  2,965         $ (8,452)
                                        ========         ========         ========         ========
</TABLE>

The identifiable assets are as follows at June 30, 2000 and March 31, 2001.

                                     June 30, 2000    March 31, 2001
                                     -------------    --------------
Identifiable Assets:
     Lawn and Garden                   $ 137,445        $ 147,133
     E-Commerce                            8,015           10,300
Intercompany Eliminations                 (6,915)          (9,064)
                                       ---------        ---------
               Total Assets            $ 138,545        $ 148,369
                                       =========        =========

The Company does not have material  revenue,  operating income or assets outside
the United States.


                                       7
<PAGE>


                    U.S. Home & Garden Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements


6.   Restructuring Charges.  During the period ended March 31, 2001, the Company
     decided to sell and close the Ampro Industries,  Inc. facility in Michigan.
     The Company  intends to continue to sell products that are currently  being
     manufactured  at  Ampro's  Michigan  facility  after  the  closure  of  the
     facility. The Company recognized  approximately $79,000 of expense relating
     to the sale of property and  equipment  at the Ampro  facility and $721,000
     for the termination  benefits to be paid to all 60 employees  involved with
     the  facility.   No  amounts  were  paid  prior  to  March  31,  2001.  The
     restructuring is expected to be completed by September 30, 2001.

7.   Subsequent  Event.  Subsequent  to March 31,  2001,  a decision was made to
     discontinue  the services  associated  with  Egarden  Inc.,  the  Company's
     Internet subsidiary. Egarden Inc. intends to maintain the minimum number of
     personnel necessary to maintain the infrastructure of the website.  Egarden
     Inc.  expects  to  recognize  approximately  $500,000  of  expense  for the
     termination  benefits to be paid to 17 of its  employees  involved with the
     website and the Company will  evaluate the value of Egarden  Inc.'s  assets
     under SFAS 121 which could  result in a  writedown  in assets of up to $8.5
     million during the quarter ending June 30, 2001.

Item 2.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Private  Securities  Litigation  Reform Act of 1995 provides a "safe harbor"
for  forward-looking  statements.  Certain  information  included in this Report
contains  statements that are  forward-looking,  such as statements  relating to
plans for the Company's  future  activities.  Such  forward-looking  information
involves  important  known  and  unknown  risks  and  uncertainties  that  could
significantly  affect actual results,  performance or achievements in the future
and,  accordingly,   such  actual  results,   performance  or  achievements  may
materially  differ  from  those  expressed  or  implied  in any  forward-looking
statements  made by or on behalf of the Company.  These risks and  uncertainties
include,  but are  not  limited  to,  those  relating  to the  Company's  growth
strategy,  customer  concentration,   outstanding  indebtedness,  dependence  on
weather conditions,  seasonality, expansion and other activities of competitors,
ability to successfully  integrate  acquired  companies and products lines,  the
Company's  ability to successfully  commercialize  its new  business-to-business
e-commerce  website,  changes  in federal  or state  environmental  laws and the
administration  of such laws,  protection  of trademarks  and other  proprietary
rights,  and  the  general  condition  of the  economy  and  its  effect  on the
securities  markets and other risks detailed in the Company's other filings with
the  Securities  and  Exchange   Commission.   The  words  "believe,"  "expect,"
"anticipate,"   "intend"   and   "plan"   and   similar   expressions   identify
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements,  which speak only as of the date the statement
was made.

General

U.S. Home & Garden Inc., ("the Company"), manufactures and markets a broad range
of  brand-name  consumer  lawn and garden  products  through  its  wholly  owned
subsidiaries,  Egarden Inc., Ampro Industries,  Inc.  ("Ampro"),  Easy Gardener,
Inc. ("Easy Gardener"), and Golden West Agri-Products, Inc., and Easy Gardener's
wholly owned  subsidiaries,  Weatherly  Consumer  Products Group,  Inc. and Weed
Wizard Acquisition Corp. Since 1992, the Company consummated eleven acquisitions
of  complementary  lawn and garden  companies and product lines for an aggregate
consideration  of   approximately   $111  million  in  cash,  notes  and  equity
securities.  As  a  result  of  such  acquisitions,  the  Company  recognized  a
significant amount of goodwill, which, in the aggregate, was approximately $71.4
million,  net of  accumulated  amortization,  at March 31, 2001.  The Company is
currently  amortizing such goodwill using the straight-line  method over various
time periods ranging from 5 to 30 years.


                                       8
<PAGE>


Results of Operations

The following  table sets forth,  for the periods  indicated,  certain  selected
financial data as a percentage of net sales:

<TABLE>
<CAPTION>
                                                        Three Months Ended              Nine Months Ended
                                                             March 31,                      March 31,
                                                             --------                       --------
                                                       2000            2001            2000            2001
<S>                                                   <C>             <C>             <C>             <C>
Net sales                                             100.0%          100.0%          100.0%          100.0%
Cost of sales                                          52.7            53.4            53.1            54.0
Unusual item                                            2.5              --             1.5              --
                                                     ------          ------          ------          ------
Gross profit                                           44.8            46.6            45.4            46.0
Selling and shipping expenses                          17.9            19.0            21.9            25.5
General and administrative expenses                     5.4            15.5            12.7            25.0
Restructuring charges                                    --             3.0              --             1.6
Depreciation and amortization                           3.9             6.9             6.1            10.5
                                                     ------          ------          ------          ------
Income (loss) from operations                          17.6             2.2             4.7           (16.6)
Interest expense, net                                  (4.9)           (7.0)           (8.6)           (9.8)
Income tax benefit (expense)                           (5.8)           (3.2)            1.7            10.2
Minority interest in loss of affiliate                   .7             1.3              .4             1.5
                                                     ------          ------          ------          ------
Income (loss) before extraordinary item                 7.6            (6.7)           (1.8)          (14.7)
Extraordinary item                                      2.6              --             1.5              --
                                                     ------          ------          ------          ------
Net income (loss)                                      10.2%           (6.7)%           (.3)%         (14.7)%
                                                     ======          ======          ======          ======
</TABLE>

Three Months Ended March 31, 2001 Compared to Three Months Ended March 31, 2000

Net sales.  Net sales  decreased by $10.0  million,  or 27.4%,  to $26.5 million
during the three  months  ended  March 31,  2001 from $36.5  million  during the
comparable  period in 2000.  The decrease in net sales was primarily a result of
poor spring weather, a generally slower economic environment and major customers
moving to just-in-time inventory management programs,  which the Company expects
will cause some sales to shift to the fourth quarter ending June 30, 2001.

Gross profit. Gross profit decreased by $4.0 million, or 24.5%, to $12.3 million
for the  three  months  ended  March 31,  2001 from  $16.3  million  during  the
comparable  period in 2000.  Gross profit as a percentage of net sales increased
to 46.6%  during the three  months  ended March 31,  2001 from 44.8%  during the
comparable  period in 2000.  The decrease in gross profit was due to the decline
in sales.  The increase as a percent of net sales was primarily  attributable to
expenses  associated with a recall of a Weed Wizard product during the March 31,
2000 period.

Selling and shipping  expenses.  Selling and shipping  expenses  decreased  $1.5
million,  or 23.2% to $5.0 million  during the three months ended March 31, 2001
from $6.5 million during the  comparable  period in 2000. As a percentage of net
sales,  selling and shipping expenses increased to 19.0% during the three months
ended  March 31,  2001 from 17.9%  during the  comparable  period in 2000.  This
decrease  in  expense  and  increase  as a percent  of net  sales was  primarily
attributable to the decrease in net sales for three months ended March 31, 2001.

General  and  administrative  expenses.   General  and  administrative  expenses
increased $2.1 million or 109.8%,  to $4.1 million during the three months ended
March 31, 2001 from $2.0  million  during the  comparable  period in 2000.  This
increase is primarily due to the increased start-up and administrative costs for
Egarden Inc. As a percentage of net sales,  general and administrative  expenses
increased to 15.5% during the three months ended March 31, 2001 from 5.4% during
the comparable period in 2000.


                                       9
<PAGE>


Depreciation and amortization.  Depreciation and amortization expenses increased
by $407,000 or 28.5% to $1.8  million  during the three  months  ended March 31,
2001 from $1.4 million  during the comparable  period in 2000.  This increase is
primarily a result of the acquisition of Egarden Inc. and  amortization  related
to certain  exclusivity  contracts for Egarden Inc. and depreciation  related to
the   implementation  of  the  Company's  and  Egarden's  new  fully  integrated
enterprise  planning  systems.  As a percentage of net sales,  depreciation  and
amortization  expenses increased to 6.9% during the three months ended March 31,
2001 from 3.9% during the comparable period in 2000.

Restructuring  Charges.  During the period  ended  March 31,  2001,  the Company
decided to close the Ampro Industries,  Inc.  facility in Michigan.  The Company
intends to continue to sell products that are currently  being  manufactured  at
Ampro's  Michigan  facility  after the  closure  of the  facility.  The  Company
recognized approximately $79,000 of expense relating to the disposal of property
and equipment at the Ampro facility and $721,000 for the termination benefits to
be paid to 60 employees  involved with the facility.  No amounts were paid prior
to March 31, 2001.  The  restructuring  is expected to be completed by September
30, 2001.

Income from  operations.  Income from  operations  decreased  by $5.8 million or
90.9% to  $582,000  during the three  months  ended  March 31,  2001,  from $6.4
million  during the  comparable  period in 2000.  The  decrease  in income  from
operations was primarily due to decreased net sales and increased start-up costs
for Egarden Inc. of  approximately  $2.3 million.  As a percentage of net sales,
income from  operations  decreased  to 2.2% for the three months ended March 31,
2001 from 17.6% during the comparable period in 2000.

Interest  expense.  Net  interest  expense  increased  $76,000,  or 4.3% to $1.9
million  during the three months ended March 31, 2001,  from $1.8 million during
the  comparable  period in 2000.  The increase in interest  expense is primarily
related to an increase in the Company's  borrowings  and interest rate under the
Working Capital Facility  partially  offset by the Company's  repurchase of $6.3
million  of  the  mandatorily  redeemable  trust  preferred  securities  of  its
subsidiary, U.S. Home & Garden Trust I, during the prior twelve months.

Income taxes.  Income tax expense  decreased to $840,000 during the three months
ended March 31, 2001 from $2.1 million during the comparable period in 2000. The
income  tax  benefit  or  expense  for each  interim  period  is based  upon the
Company's estimated effective income tax rate for the year.

Minority  interest in loss of affiliate.  Minority interest in loss of affiliate
increased $84,000, to $343,000 during the three months ended March 31, 2001, net
of tax expense of $49,000,  from $259,000 during the comparable  period in 2000,
net of tax  expense of  $204,000.  Minority  interest  relates to the  Company's
partial ownership of Egarden Inc.  Egarden's  results are fully  consolidated in
the Company's financial statements.

Net income  (loss).  Net loss  increased to $1.8 million during the three months
ended  March 31,  2001 from net income of $3.7  million  during  the  comparable
period in 2000.  Net loss per common share  increased to $0.10 per share for the
three  months ended March 31, 2001 from net income of $0.17 per share during the
comparable  period in 2000.  The  increase  in net loss and net loss per  common
share is primarily  attributable to lower net sales and increased start-up costs
for Egarden Inc. There were fewer weighted average common and common  equivalent
shares  outstanding  in the three  months  ended March 31, 2001  compared to the
comparable period in the prior year due to the Company's repurchase of shares of
its common stock.


                                       10
<PAGE>


Nine Months Ended March 31, 2001 Compared to Nine Months Ended March 31, 2000

Net sales.  Net sales  decreased by $12.6  million,  or 19.9%,  to $51.0 million
during  the nine  months  ended  March 31,  2001 from $63.6  million  during the
comparable  period in 2000.  The decrease in net sales was primarily due to poor
spring weather, a generally slower economic  environment and the Company's major
customers  moving  to  just-in-time  inventory  management  programs,  which the
Company expects will cause some sales to shift to the fourth quarter ending June
30, 2001.

Gross profit. Gross profit decreased by $5.4 million, or 18.8%, to $23.4 million
for the nine  months  ended  March  31,  2001  from  $28.9  million  during  the
comparable  period in 2000.  Gross profit as a percentage of net sales increased
to 46.0%  during the nine  months  ended  March 31,  2001 from 45.4%  during the
comparable  period in 2000.  The  decrease in gross  profit was due to the sales
decline.  The  increase as a percent of net sales was due  primarily  to expense
associated  with a recall of a Weed  Wizard  product  during the March 31,  2000
period.

Selling and shipping expenses. Selling and shipping expenses decreased $889,000,
or 6.4% to $13.0 million  during the nine months ended March 31, 2001 from $13.9
million during the comparable period in 2000. Selling and shipping expenses as a
percentage  of net sales  increased  to 25.5% during the nine months ended March
31,  2001 from 21.9%  during the  comparable  period in 2000.  The  decrease  in
selling  and  shipping  expense  and  increase  as a  percent  of net  sales was
primarily  attributable  to  the  decrease  in net  sales  partially  offset  by
increased selling and development costs for Egarden Inc.

General  and  administrative  expenses.   General  and  administrative  expenses
increased  $4.6 million or 56.7% to $12.7  million  during the nine months ended
March 31, 2001 from $8.1  million  during the  comparable  period in 2000.  This
increase is primarily  due to increased  start-up and  administrative  costs for
Egarden Inc. As a percentage of net sales,  general and administrative  expenses
increased to 25.0% during the nine months ended March 31, 2001 from 12.7% during
the comparable period in 2000.

Depreciation and amortization.  Depreciation and amortization expenses increased
by $1.5 million or 37.6% to $5.3 million  during the nine months ended March 31,
2001 from $3.9 million  during the comparable  period in 2000.  This increase is
primarily a result of the acquisition of Egarden Inc. and  amortization  related
to certain  exclusivity  contracts for Egarden Inc. and depreciation  related to
the   implementation  of  the  Company's  and  Egarden's  new  fully  integrated
enterprise  planning  systems.  As a percentage of net sales,  depreciation  and
amortization  expenses increased to 10.5% during the nine months ended March 31,
2001 from 6.1% during the comparable period in 2000.

Restructuring  Charges.  During the period  ended  March 31,  2001,  the Company
decided to close the Ampro Industries,  Inc.  facility in Michigan.  The Company
intends to continue to sell products that are currently  being  manufactured  at
Ampro's  Michigan  facility  after the  closure  of the  facility.  The  Company
recognized approximately $79,000 of expense relating to the disposal of property
and equipment at the Ampro facility and $721,000 for the termination benefits to
be paid to 60 employees  involved with the facility.  No amounts were paid prior
to March 31, 2001.  The  restructuring  is expected to be completed by September
30, 2001.

Income (Loss) from  operations.  During the nine months ended March 31, 2001 the
Company's loss from operations increased by $11.4 million to $8.5 million during
the nine months  ended March 31,  2001,  from  income  from  operations  of $3.0
million  during the  comparable  period in 2000.  The loss from  operations  was
primarily due to start-up costs for Egarden Inc. of  approximately  $7.2 million
and  the  decrease  in net  sales.  As a  percentage  of net  sales,  loss  from
operations  increased  to 16.6% for the nine  months  ended  March 31, 2001 from
income from operations of 4.7% during the comparable period in 2000.


                                       11
<PAGE>


Interest  expense.  Net interest  expense  decreased  $433,000,  or 7.9% to $5.0
million  during the nine months ended March 31, 2001,  from $5.5 million  during
the  comparable  period in 2000.  The decrease in interest  expense is primarily
related  to  the  Company's  repurchase  of  $6.3  million  of  the  mandatorily
redeemable  trust  preferred  securities of its  subsidiary,  U.S. Home & Garden
Trust I, during the prior twelve months  partially  offset by an increase in the
Company's borrowings under the Working Capital Facility.

Income  taxes.  Income tax benefit  increased  to $5.2  million  during the nine
months ended March 31, 2001 from $1.1 million  during the  comparable  period in
2000, primarily due to the increase in the net loss before taxes. The income tax
benefit or expense for each interim period is based upon the Company's estimated
effective income tax rate for the year.

Minority  interest in loss of affiliate.  Minority interest in loss of affiliate
increased  $510,000,  to $769,000,  during the nine months ended March 31, 2001,
net of tax of $487,000,  from $259,000 during the comparable period in 2000, net
tax of $204,000. Minority interest relates to the Company's partial ownership of
Egarden Inc. Egarden results are fully  consolidated in the Company's  financial
statements.

Net loss.  Net loss  increased by $7.3 million,  to $7.5 million during the nine
months ended March 31, 2001 from $210,000 during the comparable  period in 2000.
Net loss per common share increased $0.40 to $0.41 per share for the nine months
ended March 31, 2001 from $0.01 per share during the comparable  period in 2000.
The increase in net loss and net loss per common share is primarily attributable
to  decreased  net sales  and  increased  start-up  costs for  Egarden  Inc.  in
conjunction  with fewer  weighted  average common and common  equivalent  shares
outstanding  in the nine months ended March 31, 2001 compared to the  comparable
period in the prior year.

Seasonality

The  Company's  sales are  seasonal  due to the  nature  of the lawn and  garden
business,  in parallel with the annual growing  season.  The Company's sales and
shipping  are most  active  from late  December  through  May when home lawn and
garden  customers are purchasing  supplies for spring planting and retail stores
are increasing their inventory of lawn and garden products.  Additionally, since
the Company has better  adjusted its  operations to respond to the  just-in-time
inventory management programs increasingly  utilized by its major customers,  it
expects to ship an  increasingly  larger  proportion  of its total  orders on an
annual basis in the seasonally  strong fourth quarter of the year. This shift of
early seasonal product orders from the fiscal second and third quarters into the
fourth  fiscal  quarter is expected  to result in higher  revenues in the fourth
fiscal  quarter  compared  to the same  period  last year and  resulted in lower
revenues  in the second and third  fiscal  quarters  compared to the same period
last year. Sales typically decline by early to mid-summer.

Sales of the Company's agricultural products, which were not material during the
three months ended March 31,  2001,  are also  seasonal.  Most  shipments  occur
during the agricultural cultivation period from March through October.

Liquidity and Capital Resources

Since inception,  the Company has financed its operations primarily through cash
generated by operations,  net proceeds from the Company's private placements and
public sales of securities and borrowings from lending institutions.

At March 31, 2001, the Company had consolidated cash and short-term  investments
totaling $3.8 million,  and negative  working  capital of $616,000.  At June 30,
2000, the Company had consolidated cash and short-term investments totaling $8.9
million,  of which $1.6  million was  restricted,  and working  capital of $25.1
million.  The  decrease  in working  capital is  primarily  attributable  to the
increase  in the  current  portion  of the  lines-of-credit  as a result  of the
Company's  covenant violation under the Credit Agreement (defined below) and the
seasonal  increase in accounts  receivable and  inventories and the net loss for
the  period  caused by  decreased  sales and the  increased  start-up  costs for
Egarden Inc. Working capital also decreased as a result of



                                       12
<PAGE>


the  purchase  of  equipment,  repurchase  of  common  stock  for  treasury  and
repayments on the Company's  acquisition  line of credit.  The Company  recently
completed the sale of the Ampro  Industries,  Inc. facility in Michigan on April
19,  2001  for  approximately  $3.25  million,  which  was  used to pay down the
acquisition line of credit from $15 million to $11.75 milion.

Net cash used by  operating  activities  during the nine months  ended March 31,
2001 was $16.6 million consisting  primarily of the net loss for the nine months
in conjunction with an increase in accounts receivable and in inventories due to
the seasonality of the Company's  business  offset in part by  amortization  and
depreciation.

Net cash used in  investing  activities  during the nine months  ended March 31,
2001 was $2.7  million,  consisting  primarily  of cash used for the purchase of
property and equipment and package  design  partially  offset by the decrease in
restricted cash.

Net cash provided by financing activities during the nine months ended March 31,
2001 was $15.8  million,  consisting  primarily of proceeds  from the  Company's
working  capital line of credit offset in part by the repurchase of common stock
for treasury and repayments on the Company's acquisition line of credit.

On October 13, 1998,  the Company  entered into a credit  agreement (the "Credit
Agreement")  with Bank of  America ,  N.A.(the  "Bank").  The  Credit  Agreement
originally  provided  for a  revolving  credit  facility of up to $25 million to
finance the cost of acquisitions by the Company (the "Acquisition Facility") and
a  revolving  credit  facility  of up to $20  million to finance  the  Company's
working  capital  requirements  (the  "Working  Capital  Facility").  The Credit
Agreement  provided  that  borrowings  under such  credit  facilities  will bear
interest  at  variable  annual  rates equal to the higher of 0.5% above the then
current  Federal Funds Rate or the Prime Rate of Bank of America,  N.A., in each
case, plus an applicable marginal rate.

The  Company's  obligations  under the Credit  Agreement  are  guaranteed by its
subsidiaries  and  secured  by a  security  interest  in  favor  of the  Bank in
substantially  all of the assets of the Company and its  subsidiaries.  Upon the
occurrence  of an  event of  default  specified  in the  Credit  Agreement,  the
maturity of loans  outstanding  under the Credit Agreement may be accelerated by
the Bank,  which may also  foreclose its security  interest on the assets of the
Company and its subsidiaries.

Under the Credit Agreement, the Company and its subsidiaries are required, among
other things,  to comply with (a) certain  limitations  on incurring  additional
indebtedness,  liens and guaranties,  on dispositions of assets, payment of cash
dividends and cash  redemption and  repurchases  of securities,  and (b) certain
limitations on merger, liquidations, changes in business, investments, loans and
advances,  affiliate  transactions and certain  acquisitions.  In addition,  the
Company must comply with certain  financial tests and ratios. A violation of any
of these covenants  constitutes an event of default under the Credit  Agreement.
At March 31, 2001, the Company was in violation of certain financial  covenants;
however,  a waiver was obtained from the Bank which  includes a reduction of the
Acquisition  Facility to $11.75 million,  increases the interest rate paid under
both the Acquisition  Facility and the Working Capital Facility by an additional
200 basis points and requires the Company to pay a waiver fee.

The Acquisition  Facility terminates at May 15, 2001 and the outstanding balance
is payable in  quarterly  payments  starting  with June 30, 2001 and ending with
September 30, 2003. The Working Capital Facility terminates with the balance due
on September 30, 2001. The Company is required to maintain a zero balance, under
the Working Capital Facility, for at least 30 consecutive days during the period
from July 1 to  December  1 of each year.  Moreover,  if the  Company  elects to
terminate the financing  agreement prior to the expiration date, the outstanding
balance must be prepaid together with a premium of 0.5% of the total facility.

The Company is  currently  in  discussions  to  refinance  the  expiring  Credit
Agreement.  There  can be no  assurances  that a new  credit  agreement  will be
executed on terms equal to or more favorable than the expiring Credit Agreement,
or that a new  agreement can be completed at all. The Company would be adversely
affected  if it  were  unable  to  secure  a new  credit  agreement  before  the


                                       13
<PAGE>


expiration of the expiring Credit  Agreement.  Since the Company is currently in
discussion  regarding a new credit  facility,  it has  classified  all bank debt
associated with the expiring Credit Agreement as a current liability.

The Company  believes that its operations will generate  sufficient cash flow to
service the debt it has incurred.  However,  if such cash flow is not sufficient
to service such debt, the Company will be required to seek additional  financing
which may not be available on commercially acceptable terms or at all.

As of March 31,  2001,  the Company had a net deferred tax asset of $2.7 million
primarily  relating to start-up  costs for Egarden Inc. which are being expensed
for book purposes,  but are capitalized for tax purposes as start-up costs until
Egarden  Inc.  starts  generating  revenue,  at which time  these  costs will be
amortized  over a five-year  period.  The start-up  costs are largely  offset by
accumulated  tax  depreciation  and  amortization  in excess of the book amount.
Realization of the $2.7 million deferred tax asset depends on U.S. Home & Garden
Inc. maintaining its 80% ownership in Egarden Inc. Subsequent to March 31, 2001,
a decision was made to terminate the services  associated with Egarden Inc., the
Company's  Internet  subsidiary.  Egarden  Inc.  intends to maintain the minimum
number of personnel  necessary to maintain  the  infrastructure  of the website.
Egarden Inc. expects to recognize  approximately $500,000 of expense relating to
termination  benefits to be paid to 17 employees  involved  with the website and
the Company  will  evaluate  the value of Egarden  Inc.'s  assets under SFAS 121
which could  result in a writedown  in assets of up to $8.5  million  during the
quarter  ending June 30,  2001.  The  Company  will  continue  to  evaluate  its
investment in Egarden Inc. All possible strategic  alternatives for Egarden Inc.
including a sale,  merger,  strategic alliance or a discontinuance of all of its
operations. The Company expects that by July, the start of its fiscal year 2002,
Egarden Inc. should not continue to adversely impact its balance sheet or income
statement.

New Accounting Pronouncement

In June  1998,  the  Financial  Accounting  Standards  Board  issued  SFAS  133,
"Accounting  for  Derivative  Instruments  and  Hedging  Activities".  SFAS  133
requires  companies to recognize all  derivatives  contracts as either assets or
liabilities  in the balance sheet and to measure them at fair value.  If certain
conditions are met, a derivative may be specifically  designated as a hedge, the
objective  of which is to match the  timing of gain or loss  recognition  on the
hedging  derivative with the recognition of (i) the changes in the fair value of
the hedged asset or liability that are  attributable  to the hedged risk or (ii)
the earnings' effect of the hedged forecasted transaction.  For a derivative not
designated as a hedging instrument,  the gain or loss is recognized in income in
the period of change.  SFAS 133 was  effective  for the  Company for the quarter
ending September 30, 2000.

The Company does not hold any derivative  instruments  at March 31, 2001.  There
was no effect on the Company's  financial  statements  upon the adoption of SFAS
133.

In June 2000,  the FASB issued  Interpretation  No. 44,  Accounting  for Certain
Transactions  Involving Stock Compensation.  Interpretation No. 44 clarifies the
application  of APB No. 25 for certain  issues  including (i) the  definition of
employee for purposes of applying APB No. 25, (ii) the criteria for  determining
whether a plan  qualifies  as a  non-compensatory  plan,  (iii)  the  accounting
consequences of various  modifications  to the terms of a previously fixed stock
option or award,  and (iv) the accounting for an exchange of stock  compensation
awards in a business  combination.  This  Interpretation  was effective  July 1,
2000, but certain conclusions in this Interpretation  cover specific events that
occur after either  December  15, 1998 or January 12, 2000.  The Company did not
experience a material  impact on the financial  statements  upon the adoption of
Interpretation No. 44.

Inflation

Inflation  has   historically  not  had  a  material  effect  on  the  Company's
operations.


                                       14
<PAGE>


Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a result of its variable rate  revolving  credit line, the Company is exposed
to the risk of rising interest rates.  The following table provides  information
on the Company's  fixed maturity debt as of March 31, 2001 that are sensitive to
changes in interest rates.

The Acquisition Line of Credit had an                             $15 million
interest rate ranging from 7.78% to 8.34%
for the nine months ended March 31, 2001

The Working Capital Line of Credit had an                         $20 million
interest rate ranging from 6.94% to 9.62% for
the nine months ended March 31, 2001.


                                       15
<PAGE>


PART II - OTHER INFORMATION

Item 1. Legal Proceedings

     In February  2001 the Company  settled the August 1999 action that had been
     commenced  against  the  Company  and its  wholly-owned  subsidiary,  Ampro
     Industries,  Inc. ("Ampro"), in the Circuit Court of the State of Michigan,
     County of Kent, by Kenneth W. Hilbert,  E. Scott  Hilbert,  John R. Hilbert
     and Omer Messer.  Pursuant to a Settlement Agreement it was agreed that the
     Company would retain that portion of the purchase  price of Ampro which was
     being held in escrow (such escrow totaling approximately  $1,658,000 at the
     time the Settlement Agreement was executed), less $175,000.


Item 6. Exhibits and Reports on Form 8-K

(a)  None.

(b)  No reports on Form 8-K were filed during the quarter ended March 31, 2001.


                                       16
<PAGE>


                                   SIGNATURES

Pursuant  to the  requirement  of the  Securities  Exchange  Act  of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

May 15, 2001
                                              U.S. Home & Garden Inc.
                                                  (Registrant)


                                          By: /s/ Robert Kassel
                                              ----------------------------------
                                              President, Chief Executive Officer

                                          By: /s/ Donald Rutishauser
                                              ----------------------------------
                                              Chief Financial Officer


                                       17